GameStop, Sony, Ubisoft on the growth of retail in the age of downloads

by JC Fletcher on Mar 15th 2011 1:00AM

"We are looking for ways to make money," Sony's senior vice president of publisher relations, Rob Dyer, said at an SXSW Interactive panel about the rise of digital distribution. "We are not looking for a system -- whether it's iPhone, Android, whatever -- that is this wonderful socialist idea that we can give things away for free. "

That helps frame the discussion -- it was from a moneymaking perspective that representatives of Ubisoft, SCEA, and GameStop discussed retail and its role as downloadable content and digitally distributed games become more popular.

GameStop's Chris Petrovic revealed that used games aren't really dying anytime soon as DLC grows, Online Pass or no Online Pass, merely because the meat of used-game sales have nothing to do with recent releases. He said that 97% of used-game sales at the retailer fall "outside of the new-release categorization," with around half of used game sales for the PlayStation 2. The average age of a used product purchased is three years. There is "no material evidence" that Project Ten Dollar and similar initiatives are having an impact.

In addition, everyone on the panel agreed that discoverability necessitated a continued retail presence. Gift-givers browse stores, for example, rather than online marketplaces; people already visit Walmart and Best Buy and can happen upon games there. Furthermore, consumers are better trained to look at actual things on shelves than they are to scroll through lists. The box has marketing value, Ubisoft's Steve Carlin said.

GameStop is better suited to upselling DLC in-store than other retailers, according to the panel, because it doesn't have competing departments fighting for promotions. If a "big box" handed out gift cards with purchases, for example, there's no guarantee the promotion would operate across the whole store or would be an electronics-only card, or something like that. But everyone agreed that the big stores were planning for downloadable content sales in-store, merely to keep up.

Sony's Dyer emphasized throughout the panel that Sony doesn't see retail as competition for PSN. He spoke of "expanding the pie" and creating "sticky customers" who can get Sony content from multiple sources. The company is still thinking about how long to wait to release full games digitally, in order to avoid "throwing retailers under the bus" while also extending back-catalog sales of the game.

Tags: digital-distribution, gamestop, retail, rob-dyer, scea, sxsw-2011, ubisoft

Reader Comments (29)

Glad to see not all company's are so Gun Ho about getting rid of retail. Honestly retail is the only way I would ever pay $60 for a game, simply because I'm a person who wants to be able to hold hat I own. Hell I still even buy CD's.

@Comet 20

*What I own

Although I do love hats also.

@Comet 20
Team Fortress 2 player?

@Comet 20 As long as you're self-correcting, 's is used in the possessive, while just adding an s usually makes a plural. "A company's companies" would refer to multiple companies a parent company owns.

"CDs" is the correct plural form. CDs are generally very spartan and don't own anything of their own, instead choosing to live in cramped jewel cases. Many CDs' jewel cases line the wall of your shelf, no doubt. (plural possessive, when speaking of the ownership of multiple owners, the apostrophe comes after the s. The s isn't necessary following another s: e.g. "cats's").

And the phrase you were looking for was "gung ho". "Gun Ho", I believe is a Dallas-published men's magazine focusing on photos of scandalously-clad ladies holding firearms in compromising positions.

@onan *shrug*

grammar haters gonna hate.

No one minds or notices genuine accidental typos (what -> hat), but showing a lack of comprehension of first grade English rules can cost a person job opportunities and promotions down the line. Better to hear it from random internet guy than from your boss at your year-end review.

On topic though, game companies aren't interested in getting rid of retail at all, it's the second-hand market that causes issues due to lost revenue. I find that 97% figure highly suspect. Those new releases are worth a LOT to Gamestop, otherwise they wouldn't command the highest prices for both used sales and trade-in values. I'm guessing that 3% accounts for at least 30% of their gross income, if not more.

@Comet 20

Well, I think that is the whole point of digital distrobution. To strip consumers of their ability to control product and to eliminate the retail middleman. Remember when Amazon deleted e-books from their customers Kindles without their knowledge or permission?

http://www.slate.com/id/2223214/

That is akin to someone from Amazon walking into your home and taking your purchase from you and burning it, then excusing it by saying "we left you your refund on your kitchen counter. Quit crying."

The ideal that a corperation has the legal ability to invade my digital space to remove or alter something I rightfully bought, truely bothers me.

@onan

Off topic: Gotta agree that grammar is seriously important. Now I see people not able to differentiate between "are" and "our". *Shrugs*

@Ballistic H

"are" and "our" really?!

That's more than grammatical problem, that's bordering on illiterate! It seems like education standard on the internet are slipping.

@onan Its not that people hate you for using correct grammar, its that youre talking down to everyone.

@Comet 20

I would also like to add; If you are banned (or even hacked) from a service, all your content goes down the drain. So say you spent X amount of monies on Digital Downloads instead of buying the physical disc, you get banned (or hacked), all your hard earned investments are now gone.

So until they change the Digital Downloads license rules CDs will be around for a while. The only way I see it being done is have a physical and Digital option in one. You buy the physical content and you can legally own a digital copy of it as well. Some movie companies are doing this, why not the same with our games?

@ComedyInK

It depends on the service. Steam just recently did exactly that to a customer who reportedly was trying to sell his account and games, although word is they later reinstated him. But the fact remains that Valve has the power to steal $1800 right out of his pocket anytime they feel like it.

However, XBLA doesn't suffer the same ill (except for the indie games, which I would never purchase for this very reason). They can ban you all they want, and you can still keep playing your games, alone anyway.

@onan
Yeah dude, it's not 'grammar haters', it's the fact that you made a douche out of yourself by appearing to be overly condescending. That's also something a job boss will be looking for during a year-end review; whether or not you can correct other people to build them up or to bring them down.

@DJMaxxi I didn't intend any condescension. I tried to make it somewhat entertaining so it might stick, since memory studies have shown the more silly, lurid, or pornographic situation an idea is framed in, the more likely that idea will be retained. I don't hold it against individual people or think less of them, it's really the poor education system that's at fault. (Douchevibes are kind of inevitable when presenting remedial concepts, though. Oh well.)

I know I'm not going to fix the internet's grammar problems (and never try), but Comet 20 self-corrected, so massive amounts of respect for that. I just dropped some additional info in case he was interested. No offense intended, and apologies to Comet 20 if you took it the wrong way.

If there's one nice thing about map packs and stuff being sold in stores, it's not having to deal with that infuriating space buck overflow that you can never really spend.

@TheDarkWayne

Really though, I see that as more of a problem with Microsoft then as a problem with digital distribution.

@Colin Sony does it too (not sure about NIntendo). It's only an issue if you spend below a certain amount (here it's £5) - above that, you're charged exactly as you should be, which could take into account leftover change from previous purchases. Not sure if they'd really be any worse off charging you the right amount below £5 or if they just want you to spend more, but at least it's better than having to buy fixed amounts of points - something I found infuriating about Bioware points when buying ME2 DLC.

@tobz1000

It's been a while, but I am certain you can buy something on PSN for the exact amount.

@TheDarkWayne That's an issue with the credit card companies. They have to have those minimum purchase values, otherwise the credit fees would make it way less profitable to make microtransactions available.

I think a friend of mine said it best, most of these DLCs are maybe worth a beer or two during a night out, and playing through something like Mass Effect 2 content is an evening you'll end up saving way more money than you otherwise would have spent.

If you think of that $1-2 dollars stuck in limbo forever as what you would have given as a (one time only) tip to the bartender, you'll stop thinking about it completely.

@tobz1000

I'm pretty sure on PSN you can use exact amount with a credit card. But you're right, Nintendo does it too.

Fake money is something that needs to die.

"We are looking for ways to make money,"

You don't say. . .

I happen to agree with you. Grammatical errors run rampant in online forums and comment sections. I can understand using online abbreviations (ie. LOL, OMG, etc.), but it's amazing how little people seem to care about correct grammar and spelling. That said, I think people for the most part get offended when they get corrected. Especially if it's in the condescending manner in which you did it. Just wanted to let you know so you can be a little more understanding next time you're correcting someone online or offline. Better you get corrected by some random guy online than someone in person that wants to smack the crap out of you! :)

So Sony is waiting to release more PS3 games on PSN while there still isn't a "PS2 Collection" yet? I would love to play me some Okami on the PS3!

@TheRepublic
that has more to due with compatablity than anything else
ps1 games work flawlessly because the PS3 uses the ps1 cpu as an I/O controller like the PSs2 did. but if you have a PS3 slim, you don't have either the PS2 cpu or PS2 gpu on board, and because Sony still hasn't figured out software emulation, it would be unfair and likely unprofitable to release PS2 games on PSN.

looking forward in time, because cell architecture is being used in the PS3 and i susspect the NGP, as long as Sony uses a varent of cell from here on out, we should always be backwards compatable.

Wait, why is digital distribution being compared to socialism? So does that make people who favor it for some games (such as those that would never fly as full retail releases) Commies?

Damn, I must be as bad as Stalin.

"what are downloads"?

Speaking of downloads this is my reminder (to myself) that today's the last day of $19.99 Ghost of Sparta!

"He said that 97% of used-game sales at the retailer fall "outside of the new-release categorization," with around half of used game sales for the PlayStation 2."

That's bullshit. I barely shop at Gamestop, but every time I do go there and ask for a game they try and sell me the used version first.

Coincidentally I went to Gamestop yesterday to buy Radiant Historia (Best Buy didn't have stock and Amazon out of stock). The clerk told me they didn't have the game in stock...two seconds later he retracted his statement and said "we don't have the game USED." I restrained myself from giving him my angry WTF face and told him to get me a new copy. The moral of the story is that some Gamestop clerks are probably trained to sell used copies first, no matter how old the game is.

@Lerkero
while i would like to point out that personal experence is not verifiable proof of an entire system, it is clear that gamestop is clearly driven by somthing called "profit margins". i esp like how they try to push a newer used game that's only 4$ less than the 60$ unopened new one.
if game consumers were more app to use Ebay, craigslist, and the like to obtain 'market value' for their games instead of undervalued store credit or what not, then we might have even more money to stimulate the game economy via new game purchases and avoid this pitfall.
oh well.

Hey -- where were you sitting, JC? I was at this panel.

GameStop, Sony, Ubisoft on the growth of retail in the age of downloads

Reader Comments (29)

Posted: Mar 15th 2011 1:05AM Comet 20 said

Posted: Mar 15th 2011 1:06AM Comet 20 said

Posted: Mar 15th 2011 1:40AM Typhonic said

Posted: Mar 15th 2011 1:42AM onan said

Posted: Mar 15th 2011 2:17AM onan said

Posted: Mar 15th 2011 2:26AM That Burning Sensation said

Posted: Mar 15th 2011 2:33AM Ballistic H said

Posted: Mar 15th 2011 2:58AM Seven Hour War said

Posted: Mar 15th 2011 7:15AM LEONLEONLEON said

Posted: Mar 15th 2011 7:31AM ComedyInK said

Posted: Mar 15th 2011 9:10AM c0bra95 said

Posted: Mar 15th 2011 1:03PM DJMaxxi said

Posted: Mar 15th 2011 2:24PM onan said

Posted: Mar 15th 2011 1:17AM TheDarkWayne said

Posted: Mar 15th 2011 1:23AM Colin said

Posted: Mar 15th 2011 1:43AM tobz1000 said

Posted: Mar 15th 2011 2:18AM That Burning Sensation said

Posted: Mar 15th 2011 2:28AM onan said

Posted: Mar 15th 2011 2:41AM Colin said

Posted: Mar 15th 2011 2:15AM That Burning Sensation said

Posted: Mar 15th 2011 10:01AM Dukk420 said

Posted: Mar 15th 2011 3:04AM TheRepublic said

Posted: Mar 15th 2011 9:23PM alienclay3 said

Posted: Mar 15th 2011 7:15AM Red Runner said

Posted: Mar 15th 2011 8:24AM Jerkface Killah said

Posted: Mar 15th 2011 8:35AM luigionlsd said

Posted: Mar 15th 2011 9:09AM Lerkero said

Posted: Mar 15th 2011 9:35PM alienclay3 said

Posted: Mar 16th 2011 10:20AM danielhonigman said

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